Tuesday, April 15, 2014 6:37:44 PM
***Natures Cure III, LLC Revenue Potential Analysis DD – For QASP (Updated 4/15/14)
This analysis serves to provide some perspective to current, and potential, QASP investors. Since QASP is in negotiations with Natures Cure III, LLC I felt it was appropriate to provide a little financial and market analysis. Enjoy!
NC III, LLC Annual Raw Marijuana Revenue Projections Summary
(See supporting work, assumptions, and resources in the Appendix. Additionally, a target market segment breakout analysis has been conducted with respect to the MMJ and recreational MJ consumer segments for the Denver Metro Area.)
Currently it is unknown which category of MMJ dispensary Natures Cure III, LLC falls under. There are 3 classifications in the state of Colorado -- each has a different patient load and production range. See appendix for more information on center type classification (the market segmentation analysis indicates that NC III, LLC is either a Type 2 or Type 3 center, with Type 2 being most likely -- attempts are being made to identify the center type at this time). Therefore, all three classifications were analyzed to generate potential revenue figures for NC III, LLC.
Furthermore, NC III, LLC has applied for a recreational MJ license and if the business entity receives this license it will be able to sell and distribute recreational MJ. Thus, a MMJ+MJ analysis, using a 70/30 product marketing mix, was conducted as well.
TYPE 1 Center 100% MMJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $4.86M - $8.10M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $6.48M - $10.80M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $8.10M - $13.50M
TYPE 2 Center 100% MMJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $8.10M - $13.50M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $10.80M - $18.00M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $13.50M - $22.50M
TYPE 3 Center 100% MMJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $13.77M - $22.95M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $18.36M - $30.60M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $22.95M - $38.25M
__________________________________________________________________
TYPE 1 Center 70% MMJ + 30% recreation MJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $6.318M - $10.530M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $8.424M - $14.040M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $10.530M - $17.550M
TYPE 2 Center 70% MMJ + 30% recreation MJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $10.530M - $17.550M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $14.040M - $23.400M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $17.550M - $29.250M
TYPE 3 Center 70% MMJ + 30% recreation MJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $17.901M - $29.835M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $23.868M - $39.780M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $29.835M - $49.725M
Note:
The potential revenue summary above only includes raw marijuana, it does not include BHO, hash, edibles, tincture, salves, shake, or accessories (vapor pens, t-shirts, glass, canisters, etc.) which are also sold by Natures Cure III, LLC and add to the gross revenue potential.
__________________________________________________________________________________________________________________
Target Market Segmentation Breakout for Natures Cure III, LLC for MMJ and MJ
MMJ Business Target Consumer Segment Breakout
Colorado MMJ registered patient breakout for Denver metro area.
This serves to give people an idea of the marketplace for MMJ in Colorado and more specifically the Denver metro area, where Natures Cure III, LLC is located.
CO MMJ stats: good for number of statewide patients and Denver
CO has 113,441 valid registered MMJ patients as of 2/28/2014
Source: http://www.colorado.gov/cs/Satellite/CDPHE-CHEIS/CBON/1251593017044
10 counties make up the Denver metro-area
source: http://www.denverhomesonline.com/denver-counties-map/
Counties – MMJ registered patients
Adams – 8,962
Arapahoe – 12,214
Boulder – 9,071
Broomfield – 1,153
Clear Creek - 397
Denver – 19,981
Douglas – 3,696
Gilpin - 289
Jefferson – 12,851
Weld – 3,561
Total = 72,175 registered patients
Source: http://www.colorado.gov/cs/Satellite/CDPHE-CHEIS/CBON/1251593017044
102 MMJ dispensaries in the Denver metro area.
Source: http://gazette.com/list-and-map-colorado-issues-136-licenses-for-recreational-marijuana-sales/article/1511511
72,175/102 = 707.6 patients per MMJ dispensary
Of course the distribution is not even so this is just a reference mean. It is conceivable that Natures Cure III, LLC is a Type 2 or Type 3 Center based on the patient load for the region and number of registered dispensaries available to those registered patients.
Recreational MJ Business Target Consumer Segment Breakout
Recreational MJ Licenses in the Denver Metro Area.
33 retail recreational MJ licenses have been distributed by CO for the Denver metro area.
Denver metro area population = 2,649,400
Say only 2.5% of the total population participates in recreational MJ use (separate from MMJ patients). This gives a target segment for Natures Cure III, LLC of 66,235.
Current breakout:
(Given 2.5% of the total population and 33 distributed licenses)
66,235/33 = 2,007 patients per MJ retail licensed store
Breakout if Natures Cure III, LLC enters the market:
(If NC III, LLC gains its license then there will be 34 registered retail recreational MJ stores.)
66,235/34 = 1,948 patients per MJ retail licensed store
Breakout if the market expands to 50 stores in 2014:
(This figure is being controlled by the state of CO, so 50 might be ambitious for 2014.)
66,235/50 = 1,325 patients per MJ retail licensed store
These are still pretty staggering numbers to consider.
Sources:
http://blogs.westword.com/latestword/2014/01/marijuana_thirty_retail_stores.php
http://www.forbes.com/places/co/denver/
__________________________________________________________________________________________________________________
APPENDIX
Type 1 Center = 0 to 3,600 plants (aggregate at any one time for MMJ and MJ)
Type 1 Center = 0 to 300 patients
Type 2 Center = 0 to 6,000 plants (aggregate at any one time for MMJ and MJ)
Type 2 Center = 301 to 500 patients
Type 3 Center = 0 to 10,200 plants (aggregate at any one time for MMJ and MJ)
Type 3 Center = 501 or more patients
Sources:
Page 18 of the actual document (pg. 26 in Adobe Reader) for patient designations
http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheadername1=Content-Disposition&blobheadername2=Content-Type&blobheadervalue1=inline%3B+filename%3D%22Final+Medical+Marijuana+Rules+-+ADOPTED+090913.pdf%22&blobheadervalue2=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251883935361&ssbinary=true
Pages 9-10 for production designations
http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheadername1=Content-Disposition&blobheadername2=Content-Type&blobheadervalue1=inline%3B+filename%3D%22Permanent+Retail+Marijuana+Rules%2C+Adopted+January+10%2C+2014+.pdf%22&blobheadervalue2=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251928365541&ssbinary=true
Generally, 3-5 cured ounces are harvested off of indoor plants (2-3lbs outside). It all depends on lighting and several other variables, but one can assume that after 4 years of business Natures Cure III, LLC has a pretty good process and operation in place.
Some sources:
http://news.humcounty.com/How_Much_Money_Do_Pot_Growers_Make_.html
http://www.420magazine.com/forums/how-grow-marijuana/81264-how-grow-marijuana-everything-you-need-know.html
http://www.theweedblog.com/how-much-marijuana-does-a-marijuana-plant-yield/
This equates to the following maximum harvest (1 cycle) potential for each center type:
Type 1 Center (3,600 plants)
3oz/plant each harvest = 10,800 ounces
4oz/plant each harvest = 14,400 ounces
5oz/plant each harvest = 18,000 ounces
Type 2 Center (6,000 plants)
3oz/plant each harvest = 18,000 ounces
4oz/plant each harvest = 24,000 ounces
5oz/plant each harvest = 30,000 ounces
Type 3 Center (10,200 plants)
3oz/plant each harvest = 30,600 ounces
4oz/plant each harvest = 40,800 ounces
5oz/plant each harvest = 51,000 ounces
NC III, LLC MMJ and MJ Average Selling Price Breakout:
Based on Natures Cure III, LLC’s pricing model on their Facebook page they sell ounces for $160 for guests and $140 for members. Splitting the difference here to normalize the data yields an average price of $150/oz. for MMJ.
Current market price for retail recreational MJ is $400/oz. However, Natures Cure III, LLC tends to sell below the average market price by about 25%. Given this adjustment recreational ounces will most likely sell for $300/oz.
Potential MMJ total revenue for each center type (1 harvest cycle/yr.):
Type 1 Center (3,600 plants)
3oz - 10,800 x $150 = $1,620,000
4oz - 14,400 x $150 = $2,160,000
5oz - 18,000 x $150 = $2,700,000
Type 2 Center (6,000 plants)
3oz - 18,000 x $150 = $2,700,000
4oz - 24,000 x $150 = $3,600,000
5oz - 30,000 x $150 = $4,500,000
Type 3 Center (10,200 plants)
3oz - 30,600 x $150 = $4,590,000
4oz - 40,800 x $150 = $6,120,000
5oz - 51,000 x $150 = $7,650,000
However, rarely do the plants only have one harvest cycle per year. Several sources state that one plant can produce buds every eight weeks – so theoretically 6 harvests per year).
Sources on grow cycles:
http://www.greenmanspage.com/guides/harvest.html
http://www.willitsnews.com/ci_9404183
http://www.seeds4me.com/6-times-a-year.html
http://news.humcounty.com/How_Much_Money_Do_Pot_Growers_Make_.html
While 6 harvest cycles per year sounds great, this might be pushing the limits too much. Therefore, a more conservative 3-4 times per year is used here to compute the total annual revenue potential. 5 harvest cycles was added to show the potential if Natures Cure III, LLC is able to achieve output nearing the upper limit. Additionally, NC III, LLC can run a staggered growing and harvesting schedule to maximize resources and eliminate lag time during curing, and early plant and bud growth.
TYPE 1 Reference Range Breakout (for Type 1 Center: MMJ only based on 3 to 5 harvest cycles per plant per year):
3 Harvest Cycles/yr.
3oz - $1.62M x 3 = $4.86M
4oz - $2.16M x 3 = $6.48M
5oz - $2.70M x 3 = $8.10M
Total Annual Revenue Potential from 3 cycles = $4.86M - $8.10M
4 Harvest Cycles/yr.
3oz - $1.62M x 4 = $6.48M
4oz - $2.16M x 4 = $8.64M
5oz - $2.70M x 4 = $10.80M
Total Annual Revenue Potential from 4 cycles = $6.48M - $10.80M
5 Harvest Cycles/yr.
3oz - $1.62M x 5 = $8.10M
4oz - $2.16M x 5 = $10.80M
5oz - $2.70M x 5 = $13.50M
Total Annual Revenue Potential from 5 cycles = $8.10M - $13.50M
TYPE 2 Reference Range Breakout (for Type 2 Center: MMJ only based on 3 to 5 harvest cycles per plant per year):
3 Harvest Cycles/yr.
3oz - $2.70M x 3 = $8.10M
4oz - $3.60M x 3 = $10.80M
5oz - $4.50M x 3 = $13.50M
Total Annual Revenue Potential from 3 cycles = $8.10M - $13.50M
4 Harvest Cycles/yr.
3oz - $2.70M x 4 = $10.80M
4oz - $3.60M x 4 = $14.40M
5oz - $4.50M x 4 = $18.00M
Total Annual Revenue Potential from 4 cycles = $10.80M - $18.00M
5 Harvest Cycles/yr.
3oz - $2.70M x 5 = $13.50M
4oz - $3.60M x 5 = $18.00M
5oz - $4.50M x 5 = $22.50M
Total Annual Revenue Potential from 5 cycles = $13.50M - $22.50M
TYPE 3 Reference Range Breakout (for Type 3 Center: MMJ only based on 3 to 5 harvest cycles per plant per year):
3 Harvest Cycles/yr.
3oz - $4.59M x 3 = $13.77M
4oz - $6.12M x 3 = $18.36M
5oz - $7.65M x 3 = $22.95M
Total Annual Revenue Potential from 3 cycles = $13.77M - $22.95M
4 Harvest Cycles/yr.
3oz - $4.59M x 4 = $18.36M
4oz - $6.12M x 4 = $24.48M
5oz - $7.65M x 4 = $30.60M
Total Annual Revenue Potential from 4 cycles = $18.36M - $30.60M
5 Harvest Cycles/yr.
3oz - $4.59M x 5 = $22.95M
4oz - $6.12M x 5 = $30.60M
5oz - $7.65M x 5 = $38.25M
Total Annual Revenue Potential from 5 cycles = $22.95M - $38.25M
Now the aforementioned total annual revenue potential does not include a product marketing mix of MMJ and recreational MJ, which carry different prices and margins. Discounted market price market up for Natures Cure III, LLC is still 100% above MMJ. So, if the company uses a conservative product marketing mix of 70/30, MMJ to recreational MJ, the breakout and revenue potential changes significantly to the upside.
The annual revenue potential is as follows for 70/30 MMJ to recreational MJ mix:
Potential MMJ + recreational MJ 70/30 product marketing mix total revenue for each center type (1 harvest cycle/yr.):
Type 1 Center (3,600 plants)
3oz - 10,800 (.70) x $150 = $1,134,000
3oz - 10,800 (.30) x $300 = $972,000
Total = $2,106,000
4oz - 14,400 (.70) x $150 = $1,512,000
4oz - 14,400 (.30) x $300 = $1,296,000
Total = $2,808,000
5oz - 18,000 (.70) x $150 = $1,890,000
5oz - 18,000 (.30) x $300 = $1,620,000
Total = $3,510,000
Type 2 Center (6,000 plants)
3oz - 18,000 (.70) x $150 = $1,890,000
3oz - 18,000 (.30) x $300 = $1,620,000
Total = $3,510,000
4oz - 24,000 (.70) x $150 = $2,520,000
4oz - 24,000 (.30) x $300 = $2,160,000
Total = $4,680,000
5oz - 30,000 (.70) x $150 = $3,150,000
5oz - 30,000 (.30) x $300 = $2,700,000
Total = $5,850,000
Type 3 Center (10,200 plants)
3oz - 30,600 (.70) x $150 = $3,213,000
3oz - 30,600 (.30) x $300 = $2,754,000
Total = $5,967,000
4oz - 40,800 (.70) x $150 = $4,284,000
4oz - 40,800 (.30) x $300 = $3,672,000
Total = $7,956,000
5oz - 51,000 (.70) x $150 = $5,355,000
5oz - 51,000 (.30) x $300 = $4,590,000
Total = $9,945,000
These figures were then run for each harvest cycle analysis (3-5) and the corresponding revenue values are found in the summary at the top of this document and below.
Type 1 Center (MMJ + recreational MJ)
1 Harvest Cycle
3 oz. - Total = $2,106,000
4 oz. - Total = $2,808,000
5 oz. - Total = $3,510,000
3 Harvest Cycle
3 oz. - Total = $6,318,000
4 oz. - Total = $8,424,000
5 oz. - Total = $10,530,000
4 Harvest Cycle
3 oz. - Total = $8,424,000
4 oz. - Total = $11,232,000
5 oz. - Total = $14,040,000
5 Harvest Cycle
3 oz. - Total = $10,530,000
4 oz. - Total = $14,040,000
5 oz. - Total = $17,550,000
Type 2 Center (MMJ + recreational MJ)
1 Harvest Cycle
3 oz. - Total = $3,510,000
4 oz. - Total = $4,680,000
5 oz. - Total = $5,850,000
3 Harvest Cycle
3 oz. - Total = $10,530,000
4 oz. - Total = $14,040,000
5 oz. - Total = $17,550,000
4 Harvest Cycle
3 oz. - Total = $14,040,000
4 oz. - Total = $18,720,000
5 oz. - Total = $23,400,000
5 Harvest Cycle
3 oz. - Total = $17,550,000
4 oz. - Total = $23,400,000
5 oz. - Total = $29,250,000
Type 3 Center (MMJ + recreational MJ)
1 Harvest Cycle
3 oz. - Total = $5,967,000
4 oz. - Total = $7,956,000
5 oz. - Total = $9,945,000
3 Harvest Cycle
3 oz. - Total = $17,901,000
4 oz. - Total = $23,868,000
5 oz. - Total = $29,835,000
4 Harvest Cycle
3 oz. - Total = $23,868,000
4 oz. - Total = $31,824,000
5 oz. - Total = $39,780,000
5 Harvest Cycle
3 oz. - Total = $29,835,000
4 oz. - Total = $39,780,000
5 oz. - Total = $49,725,000
This analysis serves to provide some perspective to current, and potential, QASP investors. Since QASP is in negotiations with Natures Cure III, LLC I felt it was appropriate to provide a little financial and market analysis. Enjoy!
NC III, LLC Annual Raw Marijuana Revenue Projections Summary
(See supporting work, assumptions, and resources in the Appendix. Additionally, a target market segment breakout analysis has been conducted with respect to the MMJ and recreational MJ consumer segments for the Denver Metro Area.)
Currently it is unknown which category of MMJ dispensary Natures Cure III, LLC falls under. There are 3 classifications in the state of Colorado -- each has a different patient load and production range. See appendix for more information on center type classification (the market segmentation analysis indicates that NC III, LLC is either a Type 2 or Type 3 center, with Type 2 being most likely -- attempts are being made to identify the center type at this time). Therefore, all three classifications were analyzed to generate potential revenue figures for NC III, LLC.
Furthermore, NC III, LLC has applied for a recreational MJ license and if the business entity receives this license it will be able to sell and distribute recreational MJ. Thus, a MMJ+MJ analysis, using a 70/30 product marketing mix, was conducted as well.
TYPE 1 Center 100% MMJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $4.86M - $8.10M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $6.48M - $10.80M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $8.10M - $13.50M
TYPE 2 Center 100% MMJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $8.10M - $13.50M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $10.80M - $18.00M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $13.50M - $22.50M
TYPE 3 Center 100% MMJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $13.77M - $22.95M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $18.36M - $30.60M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $22.95M - $38.25M
__________________________________________________________________
TYPE 1 Center 70% MMJ + 30% recreation MJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $6.318M - $10.530M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $8.424M - $14.040M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $10.530M - $17.550M
TYPE 2 Center 70% MMJ + 30% recreation MJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $10.530M - $17.550M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $14.040M - $23.400M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $17.550M - $29.250M
TYPE 3 Center 70% MMJ + 30% recreation MJ
Total Annual Revenue Potential from 3 harvest cycles/yr. = $17.901M - $29.835M
Total Annual Revenue Potential from 4 harvest cycles/yr. = $23.868M - $39.780M
Total Annual Revenue Potential from 5 harvest cycles/yr. = $29.835M - $49.725M
Note:
The potential revenue summary above only includes raw marijuana, it does not include BHO, hash, edibles, tincture, salves, shake, or accessories (vapor pens, t-shirts, glass, canisters, etc.) which are also sold by Natures Cure III, LLC and add to the gross revenue potential.
__________________________________________________________________________________________________________________
Target Market Segmentation Breakout for Natures Cure III, LLC for MMJ and MJ
MMJ Business Target Consumer Segment Breakout
Colorado MMJ registered patient breakout for Denver metro area.
This serves to give people an idea of the marketplace for MMJ in Colorado and more specifically the Denver metro area, where Natures Cure III, LLC is located.
CO MMJ stats: good for number of statewide patients and Denver
CO has 113,441 valid registered MMJ patients as of 2/28/2014
Source: http://www.colorado.gov/cs/Satellite/CDPHE-CHEIS/CBON/1251593017044
10 counties make up the Denver metro-area
source: http://www.denverhomesonline.com/denver-counties-map/
Counties – MMJ registered patients
Adams – 8,962
Arapahoe – 12,214
Boulder – 9,071
Broomfield – 1,153
Clear Creek - 397
Denver – 19,981
Douglas – 3,696
Gilpin - 289
Jefferson – 12,851
Weld – 3,561
Total = 72,175 registered patients
Source: http://www.colorado.gov/cs/Satellite/CDPHE-CHEIS/CBON/1251593017044
102 MMJ dispensaries in the Denver metro area.
Source: http://gazette.com/list-and-map-colorado-issues-136-licenses-for-recreational-marijuana-sales/article/1511511
72,175/102 = 707.6 patients per MMJ dispensary
Of course the distribution is not even so this is just a reference mean. It is conceivable that Natures Cure III, LLC is a Type 2 or Type 3 Center based on the patient load for the region and number of registered dispensaries available to those registered patients.
Recreational MJ Business Target Consumer Segment Breakout
Recreational MJ Licenses in the Denver Metro Area.
33 retail recreational MJ licenses have been distributed by CO for the Denver metro area.
Denver metro area population = 2,649,400
Say only 2.5% of the total population participates in recreational MJ use (separate from MMJ patients). This gives a target segment for Natures Cure III, LLC of 66,235.
Current breakout:
(Given 2.5% of the total population and 33 distributed licenses)
66,235/33 = 2,007 patients per MJ retail licensed store
Breakout if Natures Cure III, LLC enters the market:
(If NC III, LLC gains its license then there will be 34 registered retail recreational MJ stores.)
66,235/34 = 1,948 patients per MJ retail licensed store
Breakout if the market expands to 50 stores in 2014:
(This figure is being controlled by the state of CO, so 50 might be ambitious for 2014.)
66,235/50 = 1,325 patients per MJ retail licensed store
These are still pretty staggering numbers to consider.
Sources:
http://blogs.westword.com/latestword/2014/01/marijuana_thirty_retail_stores.php
http://www.forbes.com/places/co/denver/
__________________________________________________________________________________________________________________
APPENDIX
Type 1 Center = 0 to 3,600 plants (aggregate at any one time for MMJ and MJ)
Type 1 Center = 0 to 300 patients
Type 2 Center = 0 to 6,000 plants (aggregate at any one time for MMJ and MJ)
Type 2 Center = 301 to 500 patients
Type 3 Center = 0 to 10,200 plants (aggregate at any one time for MMJ and MJ)
Type 3 Center = 501 or more patients
Sources:
Page 18 of the actual document (pg. 26 in Adobe Reader) for patient designations
http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheadername1=Content-Disposition&blobheadername2=Content-Type&blobheadervalue1=inline%3B+filename%3D%22Final+Medical+Marijuana+Rules+-+ADOPTED+090913.pdf%22&blobheadervalue2=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251883935361&ssbinary=true
Pages 9-10 for production designations
http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheadername1=Content-Disposition&blobheadername2=Content-Type&blobheadervalue1=inline%3B+filename%3D%22Permanent+Retail+Marijuana+Rules%2C+Adopted+January+10%2C+2014+.pdf%22&blobheadervalue2=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251928365541&ssbinary=true
Generally, 3-5 cured ounces are harvested off of indoor plants (2-3lbs outside). It all depends on lighting and several other variables, but one can assume that after 4 years of business Natures Cure III, LLC has a pretty good process and operation in place.
Some sources:
http://news.humcounty.com/How_Much_Money_Do_Pot_Growers_Make_.html
http://www.420magazine.com/forums/how-grow-marijuana/81264-how-grow-marijuana-everything-you-need-know.html
http://www.theweedblog.com/how-much-marijuana-does-a-marijuana-plant-yield/
This equates to the following maximum harvest (1 cycle) potential for each center type:
Type 1 Center (3,600 plants)
3oz/plant each harvest = 10,800 ounces
4oz/plant each harvest = 14,400 ounces
5oz/plant each harvest = 18,000 ounces
Type 2 Center (6,000 plants)
3oz/plant each harvest = 18,000 ounces
4oz/plant each harvest = 24,000 ounces
5oz/plant each harvest = 30,000 ounces
Type 3 Center (10,200 plants)
3oz/plant each harvest = 30,600 ounces
4oz/plant each harvest = 40,800 ounces
5oz/plant each harvest = 51,000 ounces
NC III, LLC MMJ and MJ Average Selling Price Breakout:
Based on Natures Cure III, LLC’s pricing model on their Facebook page they sell ounces for $160 for guests and $140 for members. Splitting the difference here to normalize the data yields an average price of $150/oz. for MMJ.
Current market price for retail recreational MJ is $400/oz. However, Natures Cure III, LLC tends to sell below the average market price by about 25%. Given this adjustment recreational ounces will most likely sell for $300/oz.
Potential MMJ total revenue for each center type (1 harvest cycle/yr.):
Type 1 Center (3,600 plants)
3oz - 10,800 x $150 = $1,620,000
4oz - 14,400 x $150 = $2,160,000
5oz - 18,000 x $150 = $2,700,000
Type 2 Center (6,000 plants)
3oz - 18,000 x $150 = $2,700,000
4oz - 24,000 x $150 = $3,600,000
5oz - 30,000 x $150 = $4,500,000
Type 3 Center (10,200 plants)
3oz - 30,600 x $150 = $4,590,000
4oz - 40,800 x $150 = $6,120,000
5oz - 51,000 x $150 = $7,650,000
However, rarely do the plants only have one harvest cycle per year. Several sources state that one plant can produce buds every eight weeks – so theoretically 6 harvests per year).
Sources on grow cycles:
http://www.greenmanspage.com/guides/harvest.html
http://www.willitsnews.com/ci_9404183
http://www.seeds4me.com/6-times-a-year.html
http://news.humcounty.com/How_Much_Money_Do_Pot_Growers_Make_.html
While 6 harvest cycles per year sounds great, this might be pushing the limits too much. Therefore, a more conservative 3-4 times per year is used here to compute the total annual revenue potential. 5 harvest cycles was added to show the potential if Natures Cure III, LLC is able to achieve output nearing the upper limit. Additionally, NC III, LLC can run a staggered growing and harvesting schedule to maximize resources and eliminate lag time during curing, and early plant and bud growth.
TYPE 1 Reference Range Breakout (for Type 1 Center: MMJ only based on 3 to 5 harvest cycles per plant per year):
3 Harvest Cycles/yr.
3oz - $1.62M x 3 = $4.86M
4oz - $2.16M x 3 = $6.48M
5oz - $2.70M x 3 = $8.10M
Total Annual Revenue Potential from 3 cycles = $4.86M - $8.10M
4 Harvest Cycles/yr.
3oz - $1.62M x 4 = $6.48M
4oz - $2.16M x 4 = $8.64M
5oz - $2.70M x 4 = $10.80M
Total Annual Revenue Potential from 4 cycles = $6.48M - $10.80M
5 Harvest Cycles/yr.
3oz - $1.62M x 5 = $8.10M
4oz - $2.16M x 5 = $10.80M
5oz - $2.70M x 5 = $13.50M
Total Annual Revenue Potential from 5 cycles = $8.10M - $13.50M
TYPE 2 Reference Range Breakout (for Type 2 Center: MMJ only based on 3 to 5 harvest cycles per plant per year):
3 Harvest Cycles/yr.
3oz - $2.70M x 3 = $8.10M
4oz - $3.60M x 3 = $10.80M
5oz - $4.50M x 3 = $13.50M
Total Annual Revenue Potential from 3 cycles = $8.10M - $13.50M
4 Harvest Cycles/yr.
3oz - $2.70M x 4 = $10.80M
4oz - $3.60M x 4 = $14.40M
5oz - $4.50M x 4 = $18.00M
Total Annual Revenue Potential from 4 cycles = $10.80M - $18.00M
5 Harvest Cycles/yr.
3oz - $2.70M x 5 = $13.50M
4oz - $3.60M x 5 = $18.00M
5oz - $4.50M x 5 = $22.50M
Total Annual Revenue Potential from 5 cycles = $13.50M - $22.50M
TYPE 3 Reference Range Breakout (for Type 3 Center: MMJ only based on 3 to 5 harvest cycles per plant per year):
3 Harvest Cycles/yr.
3oz - $4.59M x 3 = $13.77M
4oz - $6.12M x 3 = $18.36M
5oz - $7.65M x 3 = $22.95M
Total Annual Revenue Potential from 3 cycles = $13.77M - $22.95M
4 Harvest Cycles/yr.
3oz - $4.59M x 4 = $18.36M
4oz - $6.12M x 4 = $24.48M
5oz - $7.65M x 4 = $30.60M
Total Annual Revenue Potential from 4 cycles = $18.36M - $30.60M
5 Harvest Cycles/yr.
3oz - $4.59M x 5 = $22.95M
4oz - $6.12M x 5 = $30.60M
5oz - $7.65M x 5 = $38.25M
Total Annual Revenue Potential from 5 cycles = $22.95M - $38.25M
Now the aforementioned total annual revenue potential does not include a product marketing mix of MMJ and recreational MJ, which carry different prices and margins. Discounted market price market up for Natures Cure III, LLC is still 100% above MMJ. So, if the company uses a conservative product marketing mix of 70/30, MMJ to recreational MJ, the breakout and revenue potential changes significantly to the upside.
The annual revenue potential is as follows for 70/30 MMJ to recreational MJ mix:
Potential MMJ + recreational MJ 70/30 product marketing mix total revenue for each center type (1 harvest cycle/yr.):
Type 1 Center (3,600 plants)
3oz - 10,800 (.70) x $150 = $1,134,000
3oz - 10,800 (.30) x $300 = $972,000
Total = $2,106,000
4oz - 14,400 (.70) x $150 = $1,512,000
4oz - 14,400 (.30) x $300 = $1,296,000
Total = $2,808,000
5oz - 18,000 (.70) x $150 = $1,890,000
5oz - 18,000 (.30) x $300 = $1,620,000
Total = $3,510,000
Type 2 Center (6,000 plants)
3oz - 18,000 (.70) x $150 = $1,890,000
3oz - 18,000 (.30) x $300 = $1,620,000
Total = $3,510,000
4oz - 24,000 (.70) x $150 = $2,520,000
4oz - 24,000 (.30) x $300 = $2,160,000
Total = $4,680,000
5oz - 30,000 (.70) x $150 = $3,150,000
5oz - 30,000 (.30) x $300 = $2,700,000
Total = $5,850,000
Type 3 Center (10,200 plants)
3oz - 30,600 (.70) x $150 = $3,213,000
3oz - 30,600 (.30) x $300 = $2,754,000
Total = $5,967,000
4oz - 40,800 (.70) x $150 = $4,284,000
4oz - 40,800 (.30) x $300 = $3,672,000
Total = $7,956,000
5oz - 51,000 (.70) x $150 = $5,355,000
5oz - 51,000 (.30) x $300 = $4,590,000
Total = $9,945,000
These figures were then run for each harvest cycle analysis (3-5) and the corresponding revenue values are found in the summary at the top of this document and below.
Type 1 Center (MMJ + recreational MJ)
1 Harvest Cycle
3 oz. - Total = $2,106,000
4 oz. - Total = $2,808,000
5 oz. - Total = $3,510,000
3 Harvest Cycle
3 oz. - Total = $6,318,000
4 oz. - Total = $8,424,000
5 oz. - Total = $10,530,000
4 Harvest Cycle
3 oz. - Total = $8,424,000
4 oz. - Total = $11,232,000
5 oz. - Total = $14,040,000
5 Harvest Cycle
3 oz. - Total = $10,530,000
4 oz. - Total = $14,040,000
5 oz. - Total = $17,550,000
Type 2 Center (MMJ + recreational MJ)
1 Harvest Cycle
3 oz. - Total = $3,510,000
4 oz. - Total = $4,680,000
5 oz. - Total = $5,850,000
3 Harvest Cycle
3 oz. - Total = $10,530,000
4 oz. - Total = $14,040,000
5 oz. - Total = $17,550,000
4 Harvest Cycle
3 oz. - Total = $14,040,000
4 oz. - Total = $18,720,000
5 oz. - Total = $23,400,000
5 Harvest Cycle
3 oz. - Total = $17,550,000
4 oz. - Total = $23,400,000
5 oz. - Total = $29,250,000
Type 3 Center (MMJ + recreational MJ)
1 Harvest Cycle
3 oz. - Total = $5,967,000
4 oz. - Total = $7,956,000
5 oz. - Total = $9,945,000
3 Harvest Cycle
3 oz. - Total = $17,901,000
4 oz. - Total = $23,868,000
5 oz. - Total = $29,835,000
4 Harvest Cycle
3 oz. - Total = $23,868,000
4 oz. - Total = $31,824,000
5 oz. - Total = $39,780,000
5 Harvest Cycle
3 oz. - Total = $29,835,000
4 oz. - Total = $39,780,000
5 oz. - Total = $49,725,000
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